From 'Pluralism' to 'Ownership':
Europe's emergent policy on Media Concentrations navigates the doldrums
University of Stirling
|1.||Media Ownership Regulation in Europe
|2.||Towards a collective European policy approach
|2.1||'Media Pluralism' Directive (1996)
|2.2||'Media Ownership' Directive (1997)
The quest to curb the development of excessive national and transnational media empires has persistently re-surfaced on the European policy agenda throughout the 1990s, disappearing each time amidst a welter of controversy. As the decade draws on, newly emerging patterns of cross-sectoral domination in the European communications and media industries - accommodated by regulatory change in several Member States - seem to provide an ever more compelling case for action at the EU level. But many influential industrial voices are firmly opposed to 'interference' from Europe in the design of media and cross-media ownership regulations. Further, the legality of any European intervention aimed at curbing media concentrations is open to question, and there are many practical obstructions to harmonisation.
This article focuses on the Commission's current efforts to draft a pan-European initiative on media ownership. A recent shift in the proposed title of the draft Directive - from 'Media Pluralism' to 'Media Ownership' - reflects a more significant underlying shift in approach. A greater emphasis now on 'flexibility' for member states may be intended to build up a consensus in favour of the new draft Directive but, at the same time, it threatens to negate any of the advantages of a European-level initiative. This paper suggests that a more decisive approach will be needed.
Key words: European regulation, concentrations, media ownership, pluralism.
This is a Refereed Article published on 31 October 1997.
Citation: Doyle G, 'From 'Pluralism' to 'Ownership': Europe's emergent policy on Media Concentrations navigates the doldrums.', 1997 (3) The Journal of Information, Law and Technology (JILT). <http://elj.warwick.ac.uk/jilt/commsreg/97_3doyl/>. New citation as at 1/1/04: <http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/1997_3/doyle/>
Although there is no specific pan-European media ownership regulatory framework in place at the moment, the Commission has been working on bringing forward an initiative in this area since the publication of its Green Paper on Pluralism and Media Concentrations in the Internal Market in 1992 (CEC, 1992). The culmination of its efforts is a recently revised set of draft proposals for a Directive on Media Ownership which, at least in theory, could radically change how media ownership is regulated in most European member states.
It is difficult to generalise about the nature of existing media ownership legislation throughout Europe, because each country's rules have evolved separately and in accordance with the characteristics of its own media markets. However, two common themes are worth highlighting, as these explain the background to current controversies surrounding a pan-European policy initiative.
First, the existence of restrictions over media ownership in virtually all EU member states suggests agreement on the need for special rules, over and above any safeguards provided through domestic or EU competition law. This special need for diverse ownership of the media is generally associated with the perceived importance of maintaining an open and diverse system of media provision which reflects and promotes pluralism within society. The setting of upper limits on media ownership may be constrained by resource limitations, especially in smaller EU member states and sub-national markets. Even so, a tradition of restricting how much of the media any single owner may control has been fairly well established across most European countries.
A second shared feature is that domestic media ownership restraints within most individual EU member states have come under increasing de-regulatory pressure since the early 1990s. This pressure reflects a competitive impetus on the part of dominant domestic suppliers to participate in an ever-increasing international trend towards concentrations of mono-media and cross-media ownership (Schlesinger and Doyle, 1995; MacLeod, 1996; Humphreys, 1997). Of course, the impetus to build large media groupings is nothing new. Recent decades have witnessed the development of a number of national and transnational European conglomerates such as News International, Bertelsmann, Hachette and Fininvest (Barnard et al, 1996), all seeking to take advantage of natural economies of scale in the media. However, in the last few years, many of the traditional boundaries which separated the various sub-sectors of the media and which protected them from external competition have - as a result of, among other things, new technology and the European single market - begun to blur (Congdon et al, 1995, p4; Styles et al, 1996, p8). As these market boundaries and barriers fade, economies of scale and scope in the media have become more feasible and more attractive than ever. Consequently, many European countries have recently become less willing to write off the perceived economic opportunity costs associated with restricting domestic media and cross-media ownership.
The de-regulation of anti-concentration provisions in the United States in 1996 has tended to encourage this international trend, and many European member states have followed suit. In Germany, a new Broadcasting Treaty signed by the Laender in Autumn 1996 has relaxed previous restrictions on ownership of broadcasting companies (CE, 1997, p43). Likewise, France introduced relaxations on concentrations on ownership in the television and the radio sectors in 1994 (CE,1997, pp40-41). But the UK has led the way, as far as de-regulation within the EU is concerned, with the provisions introduced in the 1996 Broadcasting Act which radically de-regulate previous restrictions on broadcasting and on cross-media ownership.
The prevailing 'patchwork' of different media ownership regulations across Europe has led to concerns, some of which reflect the possibility that regulatory disparities obstruct cross-border investment in European media, and others which arise because of the threat to pluralism posed by the relentless expansion of national and transnational European media conglomerates. Such concerns have led media ownership regulation onto the pan-European policy agenda.
A first step was taken by the Commission with the publication of a consultative Green Paper on media concentrations and pluralism (CEC, 1992). This Paper reviewed existing levels on media concentration in Europe and suggested three possible policy options: firstly, no action at the pan-European level; secondly, action to improve levels of transparency; thirdly, positive intervention - via a Regulation or a Directive - to harmonise media ownership rules throughout the member states. Five years on from the publication of this Green Paper, no final agreement has yet been reached as to which of these options would best serve the needs of the European Union.
The failure to move forward decisively on one or other of these options may be attributed, in large measure, to the range of conflicting opinions within Europe about what the aims and the substance of a collective policy on media ownership ought to be. Such conflicts partly reflect the fundamental question of whether the European Commission has any right to pursue policies aimed at safeguarding pluralism (Beltrame, 1996; Hitchens, 1994). The European Parliament appears to believe so, and has pressed for action to address the many worrying examples of concentrations which can readily be observed in national and transnational European media markets today (Humphreys, 1997, pp5-7). The Council of Europe also evidently believes that pluralism is integral to the principle of freedom of speech and, as such, should be protected under the European legal order (Lange & Van Loon, 1991, p26). However, the 1992 Green Paper concluded that EU intervention in media ownership legislation may be justified only on the basis of securing the proper functioning of the Internal Market and not on the basis of protection of pluralism (CEC, 1992, p99).
Because concerns about competition or promoting the single market are different from concerns about pluralism, the implied aims for harmonising media ownership restrictions under these two very different approaches will naturally diverge (Iosifides, 1996, p24). Safeguarding pluralism implies a need for European-wide restrictions which would eliminate undesirable concentrations of media power, whereas promoting competition implies equalisation of ownership restrictions purely by reference to the economic needs of industry. Some mergers which do not threaten competition might pose a threat to plurality. Since media pluralism is a special concern in its own right, 'reliance on a competitive environment to foster pluralism may be to adopt a too simplistic approach' (Hitchens, 1994, p591).
From the outset, the approach to harmonisation of European media ownership policy has been characterised by uncertainty about how these two conflicting aims should be reconciled. Since DG XV took charge of advancing the pan-European approach in 1993, the Commission has been attempting 'to inscribe Parliament's quest for pluralism in the logic of the Internal Market' (Beltrame, 1996, p4).
Contention about the appropriate legal basis for intervention has not been the only obstacle thrown into the Commission's path. The 1992 Green Paper set in motion a prolonged period of public consultation concerning which of the options set out at its conclusion would represent the best course of action. Responses to the consultation process have served only to reinforce the contention surrounding aims and means for a harmonised European media ownership policy.
Whereas the European Parliament, the ESC, journalists' federations and trade unions emphasise the protection of pluralism as a primary objective for Community action on media ownership rules, industrial support for a harmonising initiative tends to be based on a range of economic considerations. The Commission summarises the industry's views thus: 'the current national rules on media ownership must change, in particular so as to cope with globalization and the impact of new technologies. ...[T]he question of the level - national or European - at which change must occur is the subject of vague or divided positions' (CEC, 1994b, p13). Some media firms regard the current patchwork of media ownership rules across Europe as an impediment to investment - a position which the Commission endorses - and they call for action to smooth the wide inconsistencies and disparities between current national media ownership rules. But all such industrial calls for change seem to favour a general liberalisation of media ownership rules. At the same time, the Commission seems to be in sympathy with Parliament's view and asserts that 'the single market cannot be put into practice at the expense of pluralism' (CEC, 1994b, p7).
Contradictory policy agendas have been apparent, not only in the public responses gathered by DG XV, but also in the contrast between objectives simultaneously being pursued in other Directorates of the Commission. While the drive towards a European 'Information Society' has been characterised by the theme of 'liberalisation' (Bangemann, 1994; CEC, 1994a), this does not sit altogether comfortably with the wish to protect indigenous cultures and to accommodate safeguards for pluralism, supported by DG XV.
So, rather than proceeding directly from its first round of consultation to formal proposals for a draft Directive, DG XV instead embarked on a further round of consultation and it circulated two studies - one looking at the criterion of actual audience as a way to measure media concentrations (GAH, 1994) and the other at the definition of a 'media controller' (Mounier & Robillard, 1994). Not surprisingly perhaps, responses to this second round of consultation have also affirmed a lack of consensus between opposing ideological camps as to the aims for a harmonised European media ownership policy (CEC, 1997).
In addition, the Commission has had to confront several practical problems associated with the enormous discrepancies in national market sizes across Europe. An absolute ceiling on media ownership capable of preventing undesirable concentrations in smaller countries would clearly place a very tight leash on media companies operating in large markets. On the other hand, if thresholds are set by reference to a certain proportion or percentage of national audiences (say, at 10 per cent of the national media market), then operators in large member states will be allowed to grow considerably larger than rivals in smaller countries. The existence of a relationship between the size or wealth of a market and the diversity of media provision it can naturally support creates further dilemmas. If the same level of diversity of media ownership is required within all European markets, then where would the resources be drawn from to support an equal number of suppliers in small and less wealthy countries or regions as exist in larger ones?
Such difficulties have deterred most European member states from firmly supporting the need for a harmonised media ownership regime. Others have spoken out in favour of the principle of subsidiarity. The UK's submission to DG XV (DNH, 1996b) points out that, even on the grounds of promoting the Internal Market, there is little to be gained from harmonising media ownership rules, since the main obstructions to cross-border expansion by European media companies are cultural and linguistic barriers, not disparities in national regulations. This point is echoed by many industry players who are opposed to any involvement by the Commission in the determination of media ownership rules for Europe (Tucker, 1997).
A compelling argument in favour of action on media ownership at the European rather than the national level is that dominant media operators in Europe wield such significant political power in their own domestic markets as to impede national regulators from instigating any effective curbs over their growth (Humphreys, 1997, p9). The current international trend towards de-regulation of traditional constraints on media and cross-media ownership at the domestic level has largely been driven along by powerful industrial concerns (Schlesinger & Doyle, 1995; MacLeod, 1996; Humphreys 1997), with pluralism taking a back seat. EU policy-making is not immune to industrial lobbying but, because of the diversity of national interests represented at the European level, there may be less opportunity for individual media suppliers to dictate their own policy requirements. Indeed, the strength of opposition from large industrial players to any European 'interference' in domestic media ownership rules may well be seen as determined resistance to a process which could dilute their political influence. Desirable though this may be for the health of democracy within Europe, the Commission's rationale in favour of European action must, it would seem, preclude this argument since it is based on safeguarding pluralism.
In spite of the obstacles and objections to the advancement of a pan-European media ownership policy, DG XV managed to take a small step forward in July 1996 with the first draft of a possible EC Directive on Media Pluralism.
The Commission's proposals involved a 30 per cent upper limit on monomedia ownership for radio and television broadcasters in their own transmission areas. In addition, the draft Directive suggested an upper limit for total media ownership - i.e. ownership of television, radio and/or newspapers - of 10 per cent of the market in which a supplier is operating. All market shares would be based on audience measures - i.e. calculated as a proportion of total television viewing, radio listenership or newspaper readership within the area in question - with consumption of each single type of media (television, radio or newspapers) divided by one-third for the purposes of assessing a supplier's overall share of the total market. The proposed derogations would allow member states to exclude public service broadcasters from these upper limits, if they so wish.
The definition of precise upper limits for media ownership has moved the policy debate onto a more practical footing. Inevitably, it has also been the site for major controversies about what level of diversity of ownership is appropriate for different market sizes. The approach taken in the proposals for a draft Directive has been to set the same fixed limits which would apply in any member state and either at the local, regional or national level, depending on which constitutes the appropriate market for the media supplier in question. Crucially, the Commission has taken the view that what counts is market share within the specific transmission area for a broadcasting service. This contrasts with the approach taken, say, in the UK, where what counts is a broadcaster's share of the national market, irrespective of what areas its service is transmitting in. From a point of view of achieving equality of pluralism for all European media consumers, the Commission's approach seems highly effective. The problem is that it seems to disregard the fact that different market sizes - whether national or sub-national - can support different levels of diversity of ownership.
In principle, the imposition of a 30 per cent upper limit on monomedia radio, television or newspaper ownership plus a 10 per cent upper limit on total media ownership, does not seem unreasonable. If pluralism is to exist, then a minimum of four suppliers each in the radio, television and newspaper sectors or ten different suppliers in the market as a whole may seem like an appropriate requirement. In practice, however, because of different rules and differing levels of resources available for media provision in each country, some of the member states of Europe would already fall foul of these proposals, even in terms of diversity of ownership at the national level. For example, Finland has only two national broadcasters, each with a market share in excess of 30 per cent (Barnard et al, 1996). The number of observable transgressions throughout Europe multiplies as the focus shifts down to smaller regional and local levels. At the same time, an upper monomedia ownership limit of 30 per cent paves the way for even higher levels of concentration in some larger national markets than is currently allowed.
DG XV's proposals address the problem of diverging national regulations and they also seem well-suited to the task of establishing and protecting minimum levels of pluralism, in equal measure, for all citizens of the EU. But opponents of a pan-European policy initiative have been quick to seize on the distinction between promoting pluralism and completing the Internal Market, and to question which of these objectives DG XV's proposals were really aimed at. Whether member states want, and can afford to resource, equal levels of diversity of ownership at the sub-national as well as national level is an additional matter. It is not at all clear how member states or the Community at large would find the economic means to redress shortfalls in diversity of ownership in some sub-national or smaller national markets.
DG XV's response to objections raised (in particular, from the UK and Germany) has been to promise a more flexible approach to the upper ceilings suggested in the September 1996 draft, indicating that the 30 per cent thresholds could be varied if national circumstances so demanded. But the Commission's negotiating position on upper ceilings is constrained by Parliament's consistent support for robust measures to counteract concentrations. Clearly, the greater the discretionary power left to member states in setting their own upper limits on media and cross-media ownership, the less effective any new Directive will be, whatever its objectives.
A revised set of proposals put forward by DG XV in Spring 1997 has introduced two small but significant modifications (Gabara, 1997). First, the title of the proposed Directive has been changed from 'Concentrations and Pluralism' to 'Media Ownership' in the Internal Market. This signals a move to deflect the focus away from pluralism (where the Commission's competence would be in question) towards the aim of removing obstacles to the Internal Market.
Secondly, a 'flexibility clause' has been introduced. This adds, to the proposed derogations, the flexibility for individual member states to exclude any broadcaster they wish from the (unchanged) upper limits, provided that the broadcaster in question is not simultaneously infringing these upper thresholds in more than one member state and, also, provided that other 'appropriate measures' are used to secure pluralism. 'Appropriate measures' might include establishing, within any organisation which breaches the limits, 'windows for independent programme suppliers' or a 'representative programming committee' (CEC, 1997).
The effect of these modifications is to withdraw from the original ambition of imposing a fixed minimum level of diversity of ownership for all European markets. Instead, member states can decide for themselves (at least for the time being ) whether or not the ownership thresholds set out in the Directive should apply to organisations operating within their own national territories. For the foreseeable future, there would be no absolute requirement for member states to enforce the upper thresholds set out in the Directive, but the new measures would prevent any member state from adopting more restrictive domestic media ownership rules (which, arguably, could obstruct cross-border investments or distort competition).
In effect then, as the switch of title suggests, the Directive is no longer about guaranteeing an equal right to pluralism (as represented by diversity of media ownership) for all EU citizens, irrespective of which European markets they live in. Although, in theory, the proposed Directive introduces a uniform set of media ownership restrictions throughout the EU, it is clear that, in practice, the 'flexibility' clause' would allow member states to maintain whatever upper restrictions on ownership are affordable - either economically or politically - in their own territories.
What, then, is the point of introducing a harmonising initiative?
Such back-tracking seems intended to boost support for a new Directive, but it makes it difficult to see how a harmonised approach could appease long-standing concerns (especially, in the European Parliament) about national and transnational concentrations of media ownership in Europe. And, in spite of this 'legalistic subterfuge', opposition to the idea of any pan-European policy initiative has not been extinguished (Gabara, 1997). The problem remains that regional media suppliers (e.g. UK broadcasters ITV), whose local market share exceeds 30 per cent but whose share of the national market is relatively small, are to be caught out by the rules in exactly the same way as what are perceived as genuine 'media moguls'; i.e. national media suppliers whose market share exceeds 30 per cent (e.g. Fininvest in Italy, or TF1 in France, or News International in the UK). But if member states use the 'flexibility clause' to exempt domestic operators from the proposed upper thresholds, then the new Directive will be meaningless. For some commentators, the legal uncertainty which the exemption clause would create 'would be worse than not having a common Directive at all. In the absence of an EU law, potential investors at least have the certainty that the national legislation applies' (Gabara, 1997).
Debate about the revised EU initiative had to be postponed in March 'in the face of ferocious lobbying against it' (Tucker, 1997). The European Publishers Council has again publicly espoused its view that a pan-European media ownership initiative is unnecessary and would only hinder the development of European media companies (McEvoy, 1997; Tucker, 1997). ITV has also expressed strong concern about how the UK's regional television system could be jeopardised under the new draft Directive, unless a 'cast-iron guarantee' of exemption were given to regional broadcasters (ITVA, 1997).
A uniform set of media ownership restrictions imposed rigidly throughout all European markets seems unfeasible, both economically and politically. But, if the approach to be taken is a flexible one, then it is open to question whether this should be determined at the pan-European level, given that member states themselves are better placed than the Commission to take account of and directly legislate for the particular characteristics of their own markets (DNH, 1996, Para 2). If a Directive on media ownership is to convey any useful benefits over and above the status quo, something more visionary than a 'flexible' approach is needed.
One possibility would be to start by acknowledging that a uniform set of media ownership rules is unworkable because the resources available for media provision are unevenly spread across EU media markets. If a re-distribution of resources is out of the question, then a non-uniform set of rules seems the only realistic option. Under these circumstances, the introduction of a 'tiered' approach - i.e. stipulating required levels of diversity of ownership for markets of different sizes - would seem to offer several advantages over the proposed 'flexible' approach. First, a 'tiered' approach would remove much of the uncertainty (for cross-border investment) associated with widely divergent national systems of media ownership regulation. Second, it self-evidently takes account of the problem posed by divergences in the resources available for media provision in markets of different sizes. Third, it might help to transcend the problem of dominant national suppliers exerting undue influence over domestic political mechanisms designed to curb their growth.
DG XV is continuing to work on these draft proposals and the substance of any forthcoming Directive - if, indeed, support for an initiative remains intact - is a matter for speculation. Whether any 'flexibility clause' would be approved by Parliament, which has repeatedly expressed its wish for strict rules to clamp down on excessive concentrations of media ownership, is an open question. Conversely, industrial concerns about the certainty and duration of the 'flexibility clause' have meant that many large media players continue to lobby against the introduction of any EC Directive.
If DG XV's efforts to negotiate support for a new initiative have to be abandoned, a timely opportunity for decisive collective European action on concentrations of ownership will have been squandered. But since, in any event, a new Directive would only come into force some three years following its official ratification, the only certainty at present is that the prevailing patchwork of regulations determined at member state level - and, increasingly, determined in response to industrial or economic concerns - will continue into the next millennium.
CEC (1994b), Communication to Parliament and Council: Follow-up to the Consultation Process Relating to the Green paper on 'Pluralism and Media Concentration in the Internal Market - An Assessment of the Need for Community Action', (COM  353 final), 5 October.
 Through the (US) Telecommunications Act, passed in February 1996.
 It is suggested that this derogation would be temporary for 10 years from the adoption of the Directive, although smaller countries may be able to apply for an extension.